MEMORANDUM

CLAY J. PEARSON, CITY MANAGER

ARA TOPOUZIAN, ECONOMIC DEVELOPMENT DIRECTOR

ECiTIES HONORS NOVI AS TOP COMMUNITY II//'/~fl'ANOVEMBER 16, 2011 ~ -;../li'// (if'1_

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The City of Novi was identified as one of seven top performing communities in the state of ?VMichigan for fostering entrepreneurial growth and economic development in a study by

researchers at iLabs, University of Michigan-Dearborn's Center for Innovation Research.

Novi was also recognized as a four star community.

eCities is an initiative of iLabs, part of the University of Michigan-Dearborn's Center for

Innovation Research. More than 100 cities, townships and villages participate in this annual

project that helps local governments understand how to encourage small-business growth

and benchmark their economic development efforts.

In addition to performing well in the numerical portions of eCities 2010, the seven top

performing communities are recognized for programs that aid entrepreneurial growth.

These communities demonstrate that they understand what small businesses need to be

successful by communicating with them and providing connections to broader resources

and insight on trends.

Novi, along with other communities, was honored today at a ceremony at UM-Dearborn

campus and presented an award for its accomplishments.

iLabs Director, Timothy Davis discussing the

accomplishments of the City of Novi at the eCitiesluncheon on November 16, 2011.

2011 Five-Star Communities

City of Ann Arbor

, City of Dearborn

City of Grand Haven

City of Kalamazoo

City of Litchfield

Charter Township of Meridian

Village of Quincy

Scio Township

City of Sterling Heights

City ofTecumseh

City of Auburn Hills

City of Farmington

Village of Jonesville

City of Kentwood

City of Marshall

City of Midland

City of Rochester Hills

City of Southfield

City of Sturgis

City of Troy

DEARBORN

eCities LuncheonNovember 16, 2011

City of Wixom

2011 Four-Star Communities

City of Alpena Alpine Township

Cascade Charter Township City of Coldwater

Charter Township of Comstock City of East Lansing

City of Frankenmuth City of Grand Rapids

City of Grandville City of Holland

City of Madison Heights City of Marquette

Charter Township of Northville City of Northville

City of Novi Village of Oxford

City of Plymouth City of Portage

City of Romulus City of Sault Ste. Marie

Superior Charter Township Thomas Township

Charter Township of Waterford

Sharing the

Best Practices of Michigan's

Local Communities

Sponsored by

iLABS

UNIVERSITY OF MICHIGAN - DEARBORN'SCENTER FOR INNOVAnON RESEARCH

DEARBORNDEARBORN

Program:

Honoring of eCities 2011 Five-Star Communities

Honoring of eCities 2011 Four-Star Communities

Welcoming Remarks

Lunch

Introduction of Speaker

Keynote Address

Presentation of eCities 2011

Chancellor Daniel E. LittleUniversity ofMichigan-Dearborn

Kim Schatzel, DeanCollege of Business

Martin DoberMichigon Economic

Development Corporation

Tim DavisDirector of iLobs

About the 2011 eCities Participating Communities• Home to 36% of Michigan's residents• Home to 44% of Michigan's college graduates• Home to 32% of Michigan's entrepreneurs• Account for 45% of Michigan's Commercial Property• Over $1 Billion in Commercial Construction• 58% of eCities participating communities share services• 44% Share services relating to Economic Development• 138 Communities have participated in eCities since 2007

iLabs can create customized benchmarking reports for participatingcommunities. For more information on detailed benchmarkingreports or the results from the business survey, please contact Tim.Davis, Director of iLabs, at ecities@umd.umich.edu or by phone at313.593.3991.

www.umdilabs.comjecitiesRecognition of eCities 2011 Top Performing Communities

City ofAuburn HillsCity of FrankenmuthCity ofGrand RapidsCity of NoviCity of Port HuronCity of Rochester HillsCity of Wixom

www.twitter.comjumdilabs

www.facebook.comjumdilabs

DEARBORN

COLLEGEOF BUSINESS iLABS

FACTOR PERFORMANCE QUALITIES OF S-STAR COMMUNITIES:

*****Invest in new infrastructure and equipment to add value to

Clusteringthe community, have larFce concentrations of commercialand industrial activity, ana ogous to businesses' desire for aninstalled base of customers and suppliers

***Offer eXistin~ and prospective businesses competitive tax

Incentivesrates for pu lie services, utilize financial tools to createinvestment opportunities for commercial development,analogous to businesses' pricing structure

****Experience increases in business property values and

Growthadditions to business equipment investment, increases inconstruction and improvements to commercial property,analogous to businesses' idea of revenue growth

Connect businesses with community resources, offers

Policies **** funding to improve business property, employ a governmentemployee focused on economic development, analogous tothe idea of businesses' marketing and service culture

****Foster an environment which is home to residents reporting

Communityself-employment income, higher median incomes, low crimerates, concentrations of residents aged 25-34 years,analogous to business' corporate culture

*****Serve as a home to concentrations of an educated and

Educationskilled workforce to fill businesses' need for knowledge-based labor, analogous to the business idea of sustaining aquality labor force

:.. _ Ii •••••• I ••••••••••••••• , •••••••••••••••••• ~ ••••••••••••••••••• I .

BEST PRACTICES REPORT CARDCITY OF NOVI

COLLEGEOF BUSI ESS

DEARBORN

OVERALL SCORE

38/50

iLABS

FEEDBACK FROM THE PANEL OF REVIEWERS:

"I wouldn't start by only stating you're a great location for an automotive enterprise. I own a socialmedia company. an environmental company and a construction related business ... I guess I won't bemoving here. Love the business assistance team! Sounds very hands on, and that is good!"

"Good Compelling Reason To Buy, good specifics, shows entrepreneurial passion, extra effort. "Wantthe business"

"Why do you only mention auto? Even though my company is an auto company, we feel it's attractive tonot be the only industry. We need to know that this is a place that can remain healthy on the occasionsauto struggles."

"Focus on customer service and staff involvement to help businesses is a nice approach."

Your qualitative responses to the three best practices survey questions were reviewed by a panel of entrepreneurs and wereevaluated based upon clarity, conciseness, uniqueness, and relevance to business. The highest possible score was 5"0 points. The

above overall score reflects the average score given to your community by the panel.

~ ,; ~ ' .

Overview and ObjectivesAs part of the eCities 2010 project, iLabs - the University of Michigan-Dearborn's Center for Innovation Research ­conducted an online survey of Michigan businesses in the Fall of 2010. Local economic development leadersencouraged businesses to take the survey, providing responses from businesses in 41 communities from 16 Michigancounties.

A total of 151 local business owners and managers participated in the survey. Their businesses represent a variety ofindustries, including: Professional Services, (15%), Real Estate, (15%), Retail Sales, (9%), Finance and Insurance, (9%),Automotive and Auto Manufacturing, (7%), and many others.

The objectives of this survey were twofold. One, to hear opinions of local businesses about what local resources andfactors are critical for community growth; and two, to learn what local governments can do to support businessgrowth and future success.

Firm Revenue, Size, and Sales MarketAs local businesses, the respondents were generally owners or managers of smaller companies. Half (51%) reportedrevenues of less than $1 million, 56% indicated fewer than 10 employees, and 58% identified their primary sales orservice market as being within 50 miles of their location. The respondents also included large companies with over$10 million in sales, more than 100 employees, and national and international sales markets.

Annual Revenue Number of Employees

• Less than $100,000

• $100,000 - $499,000

$500,000 - $999,999

• $1 million - $2,499,999

• $2.5 million - $9,999,999

$10 million or more

.1 Employee

.2-9 Employees

10-24 Employees

• 25-49 Employees

50-99 Employees

100+ Employees

State [51·250 miles] 21 %

Primary SalesMarket

Local [25 miles]

Regional 126-50 miles]

28%

30%

58% have theirprimary sales market

within 50 miles

National 8%

iLABSU lVERSITY OF MICHIGAJ -DEARBORN

Intemational 13%

Dl RSOR" IE.CiriE.S

Local government communication in the past yearThe focus of the survey was to understand the interaction between local governments and the businesses intheir community. The survey asked how many times the business was contacted by the local governmentlast year, excluding tax and utility billing. In addition, businesses were asked about their preferred number oftimes to be contacted each year by their local government.

Contacts in the Last Year vs. Preferred Number of Contacts

o times

1-2 times

3-4 times

5-6 times

7-8 times

9-10 times

11-12 times

I

- -- ~ - . J

I-- -- ~ . - - - -. - -- - ..L - J

I J- - ~

~ • # of contacts in the last 12

months

L~Preferred # ofcontacts in 12- ] months

More than 12 times

0% 10% 20% 30% 40%

More than a third (38%) of the businesses indicated they were not contacted in the previous year by theirlocal government, and the majority (59%) were contacted less than 3 times.

"That old saying that 'we are from the government, we are here to help,' make that real."

In contrast, most of the respondents (92%) indicated they would like to be contacted at least once a year.Nearly a third (31%) of the businesses responded they would like to be contacted 1-2 times a year, 25%preferred to be contacted 3-4 times, and 15% preferred to be contacted over 12 times a year. Only a smallpercentage (8%) of respondents indicated that they preferred not to be contacted by their local government.The quotes in the boxes throughout the report come from respondents when asked about some of theirsuggestions for what local government can do to help the business community.

"Truly develop a partnership with the community. The officials appear to be so busy arguingwith each other, they don 't have time to truly be a visible, caring, committed member of the

community. They appear detached."

iLABSUNIVERSITY OF MICHICA ·DEARBORNDt ,~.o~ IE.. CiriE..S

Communicating relevant information to local businesses

Methods of Communication

Email Updates

Mailed Newsletter

Community Website

Face-to-Face

Face book 11%

46%

55%

80% When provided with a list ofcommunication methods, themajority (80%) of respondentsindicated that e-mail updateswere a preferred method tocontact businesses. This wasreinforced in the commentsection of the survey as shownin the quote below.

Twitter 8%

"You need to obtain the e-mail addresses of the current management of the businessesl and send themupdates. A few times a year you should verify if the management has changedl so you can always have

the most current email addresses on file/I

More than half (55%) of the respondents indicated that they would also like to have relevant informationsent to them through a mailed newsletter. Other methods of communication such as a community website(46%), and face-to-face meetings (42%) were also cited by business leaders. Surprisingly, with the growth insocial media, neither Facebook or Twitter were identified as one of the methods that respondents would liketo receive communication from the local government.

In addition, respondents indicated that they would participate in a government-hosted event or a communityforum to learn about relevant issues facing the business community. The majority (80%) of respondentsagreed they would participate in a government-hosted event to receive relevant information. Also, morethan half (58%) of the respondents agreed they would participate in an online forum or website (includingwebinars, chat rooms, and open content resources) to receive relevant information. Several respondents,like the one quoted below, suggested business appreciation events.

"It would be nice if they did not treat business people like the enemy. Maybe even a businessappreciation event."

iLABSUNIVERSITY OF MICHIGA ·DEARBORNIECrriES

Business training and development resources for businesses

Respondents were asked about how well their community connects businesses with resources. Overall, only38% responded that their community does a good job providing resources to businesses. The followingsection details the areas of business training and professional development that would be of interest tobusinesses, with respondents asked to identify any of the following training services in which they would beinterested if the local government coordinated the training.

Areas of Business Training

Marketing and Business Development

Acquiring Capital

Business Planning and Operations

Website Development

Employee Relations

Legal Services

Workplace Safety

Effective Window Displays

International Trade

Vendor Management

Conflict Resolution

Outsourcing

19%

17%

14%

11%

9%

9%

8%

7%

7%

5%

31%

48% Almost half (48%) ofresponding business ownersand managers would beinterested in training onmarketing and businessdevelopment. Nearly a third(31%) of the respondentsagreed they would like toreceive information onacquiring capital. None ofthe other offered serviceshad more than 20% ofrespondents indicateinterest in such a program.

Respondents did share some ideas on services local governments could provide that relate to new orprospective businesses in the community. Below are some examples of their suggestions.

((Condense the information of available programs such that the owner or potential owner canunderstand what is actually out there. Many businesses do not have the time or know where to begin

searching for these programs.

((Offer business training to new business owners as a service to help them avoid the pitfallsof operating a start-up business"

iLABSU lVERSITY OF MICHIGA ·DEARBORN

Community services and how businesses view their importance

The graph below shows that businesses value the services that governments provide. The blue barsdemonstrate the percentage of respondents who indicated the service was important to a successfulcommunity. Providing public services (road maintenance and public safety) and business recruitment eachhad 92% of respondents indicate they were important to a successful community. None of the 8 itemsprovided in the survey received less than 77% of respondents indicating the service was important.

Services and Expectations

i92% 92%

90% 84% 84% 83%

80%

170% 68%

60% ~

50%

~40%

30% 120%

110%

0%Providing Public Business Business Streamlining the Balancing Tax Maintaining an Encouraging Promoting the

Services Retention Recruitment Permitting Incentives Attractive Community CommunityProcess Downtown Events

-Important To A Successful Community Your Community Performs This Well

iLABSUNIVERSITY OF MICHIGAN·DEARBORN

"The permit and building process needs to be a combined effort. Permits and the buildingdepartment working with businesses should be a selling point for the community"

In comparison, the yellow bars in the graph demonstrate the percent of respondents who indicate their localgovernment does a good job at providing the service. The gaps between the blue and yellow bars show adisconnect between the expectations of the businesses and the efforts they see by their local community.With 68% of respondents agreeing (the highest of the 8 items provided) that the community does a good jobat providing public services like road maintenance and public safety, this is still 24 percentage points belowtheir view of the importance of providing those services. The gap between expectations was smallest forpromoting the community, however this service had the lowest level of importance for the businesses. Thequote below gives voice to why the streamlining the permitting process saw the largest expectation gap atover 60 percentage points.

How to improve the business mix

Respondents were given an opportunity to share their thoughts of their community's business mix. Overall,less than half (47%) of respondents agreed that their community has a good business mix.

Responsible for Community's Business Mix

localCrlJvern~ent

Other Business Organizations!Associations

Olalmerof Co~merce

County Govern~ent

State Govem~nt

54%

IISome light industrial and manufacturing would be good; more office, perhaps some researchand development bringing the universities together."

When given a list of governments and organizations who help shape the business mix, respondents mostfrequently indicated that the local government (72%) shoulders that responsibility, followed by other businessorganizations or associations (63%) and the Chamber of Commerce (60%). County (54%) and State (37%) areseen as less critical to the mix of businesses in a community.

The quotes from respondents offer suggestions on how to improve the business mix in their community.

liThe diversity of businesses in the community is not enough to draw a substantial number ofpeople to support the community. The businesses that currently exist are good, but provide for

only a small sampling of peoples' needs.1I

iLABSUlVERSlTY OF MICHIGA ·DEARBORN

Overall SatisfactionRespondents were given an opportunity to share their thoughts on how their community supports businessgrowth and future success. Overall, less than half (46%) of the respondents agreed they were satisfied withtheir local government efforts at economic development. Business leaders had an opportunity to share theirthoughts on how their community is doing at helping businesses locate and remain in their communities.Below are some of the things they had to say:

Approvals and Taxes"Make the community great and businesses will locate here."

"Look to other communities our size and study their successes""Building department needs to be streamlined and the city code needs to be completely redone"

"Inspectors are overly aggressive over 'minor' infractions"

Incentives"Offer tax abatements and incentives for businesses. Do not forget the existing businesses that arestruggling, they should have the same incentives offered to them. I am always excluded because I

already exist, even though I am struggling to make a profit.""Set a positive tone that businesses are appreciated and welcome. Provide good communication

and clear paths to receive info to assist businesses - then get out of the way."

More government communication"Active meetings to reveal and enhance the State and local resources available to start businesses.

Don't try to build a government process, or processes, to do what the private sector alreadyprovides!! These ties - between small businesses - make a community work."

"Hands-on face-to-face quarterly meetings with business owners by mayor and staff""Provide infrastructure and remove barriers (physical, financial, and logistic) that hinders start-ups

and limits the growth of existing businesses."

About iLabsiLabs is the University of Michigan-Dearborn's Center for Innovation Research. Dedicated to advancing theunderstanding of corporate, entrepreneurial, and institutional innovation and its impact on economicdevelopment, iLabs conducts eCities - an annual research study that examines community-level factors thatinfluence entrepreneurship, economic development, and job growth. For more information, please visitwww.umdilabs.com.

Connect with iLabsUsing your Smartphone and the associated application,snap a photo of the icons to the right and link to moreinformation on the project.

OHRe'IR IE.LrriE.S UNIVERSITY OF MICHIGAN·DEARBORN iLABS